Billable Hours Calculator


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Calculate how much you should charge for your work!

Our calculator is an essential tool for freelancers and business owners. It allows calculating the amount you can charge for your work based on your hourly wage and the time you spend on the project.

What are billable hours?

Billable hours are the amount of time you are entitled to charge your customer for your work.

Note that number of billable hours may not always equal the number of hours you devoted to the customer. For example, you cannot charge the customer for the time you spend on his acquisition.

Billable hours are the favored settlement of work for many freelance professionals, lawyers, and business consultants.

How to calculate billable hours value?

If you wish to calculate how much you should get for the time you spend on the project. Use the following billable hours value formula.

bill_value = hourly_rate * hours

How to use our billable hours calculator?

Our calculator allows you quickly calculate the amount you can charge for your work. 

You may also use it to calculate your employees' salary if you pay for an hour of work.

The tool has built-in unit conversion, making it natural for use. You can operate using per hour rate, weekly or monthly wage. 

You can also provide the work time in the form of hours, working days, workweeks, or months.

For convenience, the calculator uses the following unit definitions.

  • one work day equals 8 hours
  • one work week equals 40 hours
  • One month equals 176 hours.

How to calculate your maximum salary?

If you wish to calculate your billable value and how much you could make per month at your current rate, type your hourly rate and the number of hours you can dedicate to work. 

It allows you to calculate your monthly income. Thus it enables you to evaluate if your hourly rate is satisfactory.

How to set the correct billable rate?

Many freelancers tend to underestimate the time needed to acquire customers and discuss customer needs. This miscalculation leads to unsatisfactory income generated from their services.

Therefore you should look holistically at the amount of work you need to do to fulfill the customer's needs. Sum up the consulting and billable work time, then add extra time for unexpected events. Proper hourly rate management may increase your economic productivity.

Consider the following example:

Mark is a freelance programmer who charges $60 per hour of work. The nature of this profession requires him to understend the needs of the customer before he provides an actual valuation of the project.

In practice, it requires several hours of consulting before the customer explains the requirements for the software. 

Let's assume Mark needs to spend five days discussing with the customer his needs and estimating the time required to create the software.

Mark estimated the time needed to code the program at 15 days.

If Mark charges the customer $60 just for 15 work days, it will give him an income of $60 * 15 days * 8 hours = $7200.

If Mark includes consulting time in the calculation, it will give him an income of $60 * (5+15 days) * 8 hours = $9600.

Mark spends the same amount of time on the project in both cases, and the final product is the same quality, but in the first case billable rate is $45 instead of $60.

That's why if Mark charges for coding time only, he should increase his rate to $80 to make the same profit as if he includes the consulting time in the valuation.


Authors

Created by Lucas Krysiak on 2022-09-30 13:41:55 | Last review by Mike Kozminsky on 2022-10-03 16:18:56

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